Sunday, February 1, 2009

Wall Street- Capital Hill vs Main Street

They just don't get it do they?

* Citigroup, recipient of some $45 billion of taxpayer funds, was blithely going about the purchase a $50 million private jet until the deal became public. Even then, the widespread public outrage didn't phase the high-fliers - but an apparent call from Treasury Secretary Timothy Geithner did. Citi meekly cancelled the purchase.
* As former Merrill Lynch CEO John Thain was agreeing to resign from Bank of America - and the newly-merged bank was requesting more government aid - it came to light that Thain had recently spent $1 million redecorating his office ($800,000 for a celebrity designer) and had doled out $4 billion in executive bonuses to favored Merrill employees just before the merger - some of the people who had driven the company in collapse and had helped it lose $15.3 billion in 2008.
* Speaking of bonuses for failure, the brokerage units along Wall Street lost more than $35 billion last year - and doled out an estimated $18.4 billion in bonuses.

But it's not just Wall Street

Capital Hill is in collusion too...

The same prescription can be written for Congress, where bad habits also abound.
New York's Charles Rangel and five other Democratic members of the House enjoyed a trip to the Caribbean sponsored in part by Citigroup (see above) in November - after Congress had approved the $700 bailout for financial firms (including Citigroup).

The members no doubt will object to the terms "junket," but that shoe fits. The National Legal and Policy Center, a watchdog group, has asked Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (TARP) to investigate the Nov. 6-9 excursion to the island of St. Maarten.
It was called the Caribbean Multi-Cultural Business Conference, but "the primary purpose ... for most participants appeared to be to take a vacation," said the NLPC. And not only was the timing lousy, but "corporate sponsorship of such an event was banned by House rules adopted on March 1, 2007, in response to the (lobbyist Jack) Abramoff scandal," the group pointed out.

God...I would so love a vacation in the sun.
How do I get invited to one of those Caribbean Multi-Cultural Business Conferences???
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